Energy audit can pay dividends

Friday

Jul 31, 2009 at 11:55 AM

Buzz word of the month? Year? Green.

Buzz word of the month? Year? Green.

Not green as in money green, but green as in save the planet green. A significant opportunity exists for homeowner associations and homeowners alike to make a difference and actually save money at the same time. The big question is what's the payback? Just what will an investment in new technology return to an organization or homeowner?

Of the $789 billion federal economic stimulus package passed by Congress earlier this year, more than $20 billions expected to help spur investment in energy-saving projects. States and local communities will get most of their money in federal fiscal year 2010, which begins Oct. 1.

Community associations can benefit directly and indirectly. By investing in energy-saving equipment, associations can help offset the rising costs of heating, cooling and lighting in buildings, clubhouses, swimming pools and other community facilities. Simply adding green features has a hidden benefit too, saving money allows homeowners to be more likely to be able to meet their fiscal responsibilities to an association.

Just what is available? A 30 percent federal income tax credit is available for individual homeowners who install energy efficient residential equipment in 2009 and 2010. The maximum amount of the credit is $1,500. A tax credit reduces the amount of tax owed dollar-for-dollar in contrast to a tax deduction, which reduces the amount of income that is taxed.

A tax credit is available to homeowners who purchase and install equipment, such as energy efficient water heaters, furnaces, boilers, heat pumps, air conditioners, insulation, windows, doors, roofs and circulating fans used in a qualifying furnace. Naturally the equipment must be new and comply with applicable performance and safety standards as described in the tax code. While insulation, windows, doors and roofs are eligible for tax credit, the cost of labor to install them is not.

A 30 percent federal income tax credit also is available to homeowners who retrofit existing dwellings with renewable energy equipment, with no upper limit on the amount of credit that can be received. Renewable sources include solar panels, solar water heaters, geothermal heat pumps, small wind energy systems and fuel cells.

The stimulus package also provides $300 million for rebates to homeowners who replace older appliances with efficient Energy Star products. Another $5 billion will be added over the next three years — nearly eight times the current annual level — to the Weatherization Assistance Program. The program provides funds to local agencies to insulate dwellings of low income homeowners.

Energy efficiency and conservation block grants are funded at $3.2 billion nationally. The grants are aimed at reducing fossil fuel emissions and total energy use and improving energy efficiency in transportation, buildings and other sectors. Funds could also be used for residential and commercial energy audits, for buildings and faculties of public schools and for public water supply and waste water systems.

An additional $500 million will go to states which must send at least 60 percent to cities and counties not receiving direct funding. With federal approval, states will distribute the remaining 40 percent of the funds for use in revolving loans and grants to nongovernmental organization.

Where to start? An energy audit is the best way for community associations to begin exploring their options. It can help identify the most cost-effective ways to conserve energy in residential buildings and community facilities. The Energy Department provides one at www.eere.energy.gov and another is offered at www.ase.org. Now is the time to take a look at the options you or your community have available through these programs. They won't last forever, but your savings and the impact you will have by becoming green will.

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